NATO allies have committed an additional $1.21 trillion in defense spending since President Donald Trump’s first term, including more than $120 billion in new spending last year alone. This surge, termed the “Trump Trillion” by NATO chief Mark Rutte, represents a significant shift in alliance investment priorities, with NATO allies purchasing more than $54 billion in U.S. defense equipment in 2025. The increased expenditure supports American manufacturers and workers while shifting more of the alliance’s defense burden to Europe.

The ‘Trump Trillion’ Behind Defense Stocks

The commitments build on NATO members’ pledge to increase defense spending to 5% of GDP by 2035, a target Trump has repeatedly championed. The White House highlighted that the latest investments are powering American industry, with a focus on expanding the industrial base to support the increased procurement levels. The following table summarizes the key financial and strategic details:

Lockheed, RTX, Boeing and Northrop Secure New Deals

The summit produced a series of new defense partnerships involving major U.S. contractors. Lockheed Martin will help establish a Patriot Advanced Capability-3 (PAC-3) missile sustainment facility in Europe and partner with Germany’s Rheinmetall to expand Army Tactical Missile System (ATACMS) production. Northrop Grumman signed letters of interest with 10 nations for its MQ-4C Triton surveillance aircraft, expanding NATO’s Allied Ground Surveillance program into the maritime domain.

RTX will launch an Advanced Medium-Range Air-to-Air Missile (AMRAAM) feasibility study to expand production in Europe, while Germany and the Netherlands plan to procure Raytheon’s Stinger missiles, with European production expected to double by 2030. Additionally, Boeing and Rheinmetall Italia announced plans to explore expanding production and sustainment of Boeing’s Small Diameter Bomb for European customers.

Strengthening the U.S. Defense Industrial Base

The White House announced roughly $3 billion in new defense-related deals and joint ventures unveiled during the summit, initiatives aimed at strengthening the U.S. defense industrial base and opening additional export opportunities. While many agreements focus on expanding manufacturing capacity in Europe, they reinforce demand for U.S.-designed defense systems. If NATO members follow through on their long-term spending commitments, companies such as Lockheed Martin, RTX, Boeing and Northrop Grumman could remain at the center of one of the largest defense procurement cycles in decades.

At the NATO Summit in Ankara on July 8, 2026, Prime Minister Mark Carney of Canada and Prime Minister Keir Starmer of the United Kingdom issued a joint statement recognizing the shared challenge of scaling defence industrial capacity and strengthening resilience. The leaders highlighted the growing interest among allies in multilateral approaches to defence financing and procurement, specifically noting the complementarity between the Defence, Security and Resilience Bank (DSRB) and the Multilateral Defence Mechanism. Both initiatives aim to operate in parallel to support collective defence and security by improving investment and coordination across the supply chain.

Complementarity of Initiatives

The joint statement emphasized that the DSRB and the Multilateral Defence Mechanism have a high degree of complementarity. Together, these efforts are intended to improve defence investment throughout the supply chain. Canada and the UK committed to engaging closely to ensure their respective initiatives develop in a coherent and mutually supportive way. Where possible within agreed mandates, the nations will seek opportunities to cooperate closely and ensure complementarity, encouraging like-minded partners to engage in these discussions.

Defence, Security and Resilience Bank Support

The announcement builds on the support for the Canada-led DSRB, which has received commitments from eight countries: Albania, Belgium, Greece, Latvia, Luxembourg, Romania, Türkiye, and Ukraine. The bank aims to mobilize private capital to support collective security and defense industrial capacity by providing long-term, low-cost financing and guarantees. In April 2026, partners agreed to the DSRB's founding Articles of Agreement in Montréal, selecting Canada as the host nation for the future headquarters with the objective of making the bank operational in 2027.

Canadian Defence Investments

Canada has made significant investments to rebuild and rearm its forces, investing over $65 billion in defence and security in the past year. This marks the first time Canada has reached NATO's 2% defence expenditure target since the fall of the Berlin Wall. The country is on a pathway to meet NATO's Defence Investment Pledge of spending 5% of GDP on defence by 2035.

Economic Impact and Leadership

Isabelle Hudon, President and Chief Executive Officer of the Business Development Bank of Canada (BDC), serves as Canada's lead negotiator for the DSRB. The Canadian defence sector accounted for more than 530 firms directly supporting 37,700 jobs in 2024, with a total of 62,100 jobs across the defence value chain. These companies generated $17.3 billion in revenues and contributed $8.6 billion to GDP in 2024. The government launched the Defence Investment Agency and the Defence Industrial Strategy to position Canadian industry to leverage $180 billion in defence procurement opportunities over the next decade.